Conventional vs. High Ratio Mortgages |
Conventional MortgageWhen a home is purchased with a down payment of 20% or more of the purchase price, this is referred to as a conventional mortgage as the loan amount does not exceed 80% of the appraised value or purchase price of a property. The balance is usually made up of a cash down payment. As an example, on a $100,000 conventional mortgage, you would make a $20,000 minimum down payment.
|
High Ratio MortgageWhen a home is purchased with a down payment between 5% and 20% of the purchase price, this is referred to as a high ratio mortgage as the loan amount does exceed 80% of the appraised value or purchase price of the property. You provide the minimum of 5% of the purchase price which is made up of a cash down payment. As an example, on a $100,000 high ratio mortgage, you would make a $5,000 minimum down payment.
|
